Free? You want free online storage? Of course you do. We've
all been taught to regard free Internet this and that as our right.
(The only cure for that line of thinking seems to be to start your
own Web business.)

But, like so many other dotcoms, online storage providers are
learning they can't rely on Web ads or relationship-marketing
newsletters to cover their costs. When Net advertising waned
earlier this year, online storage companies' free users
suddenly turned from assets into overhead. In dotcom parlance, they
couldn't be "monetized."

Netdrive.com, which once provided 100MB of free
storage, has quit providing. Ditto for Myspace.com, whose 7.6
million customers could once get up to 300MB free. High-profile
Driveway, once a partner to MSN, has discontinued its end-user
storage services. The best it hopes to do now is sell its storage
platform to other Web sites.

The air hasn't gone out of the market, though: Survivors are
scrambling to find new revenue models. Likely, they'll stumble
on a combination of end-user subscriptions and software sales. New
market entrant Everything Backup never even considered offering its
services for free, says president and CEO David Roekle; and Xdrive
and My Docs Online now charge for storage they previously gave
away. Only FreeDrive still offers free storage (cut back from 50MB
to 20MB), and it's making every effort to sell
subscriptions.

The problem is that even though users are quick to sign up for
anything that's free, that doesn't mean they'll use it
regularly-much less respond to marketing e-mails or ads. So who are
the most active online storage users and the most willing to pay
for subscription-based service upgrades? Businesspeople. That's
why so many sites are recasting their services with higher
security, wireless data access and other extras that appeal to
entrepreneurs.

Why bother with online data storage? Two words should suffice:
rolling blackouts. Today California, tomorrow all the rest of the
power grid. Why not just back up at your worksite? Sure, but where
do you store the tapes and disks? Close to the PC or server being
backed up? Lightning, flood, earthquake, tornado, fire and burglary
all threaten them.

Security experts have always insisted you should back up data
off-site. And once a file is online, it's easier for you to
access from home or the road, share it with remote co-workers or
use it to populate your company's Web site. A few providers
even let you use mobile phones to access data or forward it to PCs
and fax machines.

The provider you choose should have backup power,
mainframe-quality environmental controls, rigorous security and, of
course, a system of backups for your backups.

Who's Who of Who's Left

Nothing separates the looky-loos from the serious customers like
asking them to pay. Phil Ressler, Xdrive's senior vice
president of marketing, expects to lose 90 percent of his 9.5
million customers as a result of his company's new $4.95
monthly minimum. But he figures he needs less than 20,000 users to
make it a go, and he's already converted more than 95,000 to
paying customers.

To further its professional appeal, Xdrive has upgraded its
software platform to provide faster transfer speeds, heightened
security, peer-to-peer file sharing and tech support. Through
Xdrive, you can send files as e-mail attachments using any
Web-enabled device, including mobile phones.

The company has also struck a deal with Microsoft so that its
site is one of the options for storing Web pages online offered by
the Web Publishing Wizard of Windows XP.

Partnerships like that can help companies attract customers in
bulk. That's how My Docs Online of Naples, Florida, gets most
of its subscribers. Bell Mobility and Nextel customers use My
Docs' service to receive, view and forward files as e-mail
attachments using Web-enabled devices.

My Docs never bought into the ad-supported model. Except for a
few thousand Beta testers, individual subscriptions start at $34.95
per year for 50MB.

Although FreeDrive still offers a free 20MB "Test
Drive," try to find out about it from the company's Web
site. Arguably the largest storage provider, with 15.5 million
subscribers, FreeDrive would rather you upgrade to at least a $4.95
monthly subscription.

FreeDrive president and COO Dave Falter says about 30 percent of
his 2 million business users have followed suit-that's 30 times
the rate of consumer upgrades.

The best prices for large amounts of storage can be found at
Everything Backup, which sidestepped the temptation to provide free
storage. The still-small company's subscriptions start at
$34.95 per month for 1GB of space.

Like most of the other providers, Everything Backup downloads an
application to your desktop that you can use to map your drives.
Everything Backup's software icon also lets you schedule
automated backups of single files, directories or entire
drives.

Online storage will never replace your local hard drive, but
it's a necessary adjunct. And if you're storing sensitive
data online, shouldn't it be in a secure facility whose
operator has some chance of being there tomorrow?